The Securities and Alternate Fee (SEC) has filed a grievance in opposition to Drive Planning, LLC, and Russell Burkhalter accusing them of working an actual property Ponzi scheme through which funds have been misappropriated to Coinbase, and used to purchase a yacht and a personal jet.
Drive Planning allegedly offered unregistered securities to traders, promising they might earn a ten% return in simply three months. These returns have been presupposed to be generated by offering bridge loans to or coming into into joint ventures with actual property builders.
Surprisingly, the web site for this scheme didn’t simply promise unbelievable monetary returns; it truly promised “to guide you towards being Relationally Rich, Physically Fit and Financially Free.”
In whole, traders invested greater than $372 million within the scheme, and it at present owes $287 million to traders.
Sadly for them, nonetheless, Drive Planning didn’t have a approach to truly ship these returns, as a substitute allegedly paying them utilizing funds raised from new traders, usually encouraging present traders to ‘rollover’ their funds as a substitute of withdrawing.
The SEC claims it was essential to file this grievance as a result of Burkhalter had beforehand “pledged, on June 10, 2024, to cease accepting new investments in REAL, and to cease paying commissions or paying supposed returns to investors, he nevertheless paid sales commissions to Drive Planning sales agents on June 21.”
Moreover, Burkhalter is going by a divorce and “has recently entered into a divorce settlement pursuant to which he may transfer to his spouse property bought with investor funds.”
Learn extra: Proprietor of ‘Ponzi-like’ crypto hedge fund ordered to pay again $84M losses
Burkhalter, the founding father of the scheme, has allegedly spent closely from Drive Planning’s coffers, together with:
- $51k on RV-related bills
- $42k for his ex-wife’s lawyer
- $3.1 million for a yacht
- $319k on “clothing, jewelry, and beauty treatments,” together with spending at Diamonds Direct and Louis Vuitton
- $4.6 million on non-public jets and luxurious automobile providers
- $183k on resorts and resorts
- $749k on car bills
- $1.9 million was transferred to Coinbase ($1.2 million was transferred again to the enterprise)
- $2 million for a luxurious condominium in Cabo San Lucas
- $1.1 million to “NetJets, a private jet company”
The SEC expenses fraud in violation of the Securities Act and the Alternate Act and is looking for a director and officer ban for Burkhalter, a disgorgement of ill-gotten funds, and an order freezing different funds whereas an accounting is performed.
Protos reached out to Drive Planning for touch upon these allegations by telephone and e mail, however we didn’t obtain a response by time of publication.
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